The events of last week such as aggravation of the trade war between the U.S. and China, European Parliamentary elections, statements issued by the Fed, poor business activity data from Euro Area and Germany weighed down the EUR pair and it fell to two-year lows. However, unexpectedly weak business activity and real estate significantly impacted the US government bonds’ yields led to a sharp reversal of the trend. The euro also gained because of the closure of short positions and the British Prime Minister’s resignation announcement. The GBP/USD pair followed the euro helped by weak macroeconomic statistics from the U.S. and short positions closure finished much above its two-year low. The Japanese yen found it difficult to resist the US dollar for the most part of the week but returned to the higher levels in the previous week. Having said that here is an outlook for the upcoming week:

#1: Euro Area European Parliamentary Elections (Day 4 – 05/26/2019 Sunday)

The Euro Area polls to elect 751 members to the European Parliament come to a conclusion on Sunday.
In the European Union, elections are held every five years. European elections are important as far as the economies and financial markets are concerned mainly because of the developments in France, Italy, and the UK.

#2: New Zealand RBNZ Financial Stability Report (05/28/2019 Tuesday 21:00 GMT)

Released twice a year, the Financial Stability Report released by the Reserve Bank of New Zealand provides a lot of information about the bank’s view with respect to inflation, growth, and economic situation that significantly impact on interest rates in the future.

#3: New Zealand RBNZ Governor Adrian Orr Speaks (05/28/2019 Tuesday 23:00 GMT)

Adrian Orr, Governor of the Reserve Bank of England, is scheduled to hold a press conference in Wellington 120 minutes after the release of the report. The press conference will be webcast on the RBNZ website. Volatility is often experienced during his speeches as traders make an attempt to understand the direction of interest rates.

#4: New Zealand ANZ Business Confidence (05/29/2019 Wednesday 01:00 GMT)

In New Zealand, the ANZ Business Confidence Index came in at -37.5. The reading for the month was little changed from the -38.0 level reported in the previous month. Analysts had expected the index to come in at -42.8. Inflation expectations and pricing intentions remained relatively stable. Meanwhile, cost pressures declined. However, profit expectations, activity outlook, export intentions, investment intentions, and employment indices improved.

#5: New Zealand RBNZ Governor Adrian Orr Speaks (05/29/2019 Monday 01:10 GMT)

Adrian Orr, Governor of the Reserve Bank of New Zealand, is scheduled to testify as regards the Financial Stability Report before the Parliament Select Committee in Wellington. Volatility is often experienced during his speeches as traders make an attempt to understand the direction of interest rates.

#6: Canada BoC Rate Statement (05/29/2019 Wednesday 14:00 GMT)

The Bank of Canada uses the Rate Statement as a tool to communicate with investors as regards the monetary policy. It provides the outcome of the members’ decision on interest rates and also a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on the direction of future decisions.

#7: Canada Overnight Rate (05/29/2019 Wednesday 14:00 GMT)

In the meeting in April, the Bank of Canada decided to hold the benchmark interest rate at the same level at 1.75 percent as analysts widely expected. This is the highest interest rate ever since December 2008. Policymakers said that it is necessary to follow an accommodative interest rate policy. The Committee also noted that evaluation of the appropriate degree of monetary policy accommodation will be done on the basis of developments in household spending, global trade policy, and oil markets. Forecast for May 2019: 1.75 percent

#8: Australia Building Approvals (05/30/2019 Thursday 01:30 GMT)

In Australia, building approvals declined by 15.5 percent on a month-over-month basis in March, following the 19.1 percent increase in the prior month. Analysts had expected building approvals to decline by 14 percent. This the biggest decline ever since December 2017. Private sector buildings, excluding houses, and private sector building approvals dropped. Among states and territories, total building approvals declined in New South Wales, Victoria, Queensland, and South Australia, while approvals increased in Western Australia. Forecast for April 2019: an increase of 0.1 percent is on the cards

#9: Australia Private Capital Expenditure (05/30/2019 Thursday 01:30 GMT)

In Australia, private capital expenditure rose by 2.0 percent on a quarter-on-quarter basis in the final quarter of last year after the reading for the prior period was revised downward to a flat reading. The reading for the current quarter came above analysts’ expectations for a 0.5 percent increase. Growth was driven by a 3.2 percent increase in buildings and structures and a 0.7 percent rise in equipment, plant, and machinery. Forecast for the first quarter of 2019: an increase of 0.5 percent is on the cards

#10: New Zealand Annual Budget Release (05/30/2019 Thursday 02:00 GMT)

Released annually, the annual budget outlines the expected income and spending levels, borrowings, planned investments, and financial objectives for the year. Domestic borrowing and spending levels have an impact on the economy. While increased spending helps to generate work for contractors and jobs, borrowing levels significantly impact the country’s credit rating and provide insight into the underlying fiscal position.

#11: United States Preliminary GDP (05/30/2019 Thursday 12:30 GMT)

In the first quarter of this year, the U.S. economy grew an annualized 3.2 percent, beating analysts’ expectations for a 2.0 percent growth. In the previous quarter, the economy expanded 2.2 percent. Growth was driven by personal consumption expenditures, private inventory investment, state as well as local government spending, exports, and non-residential fixed investment. Forecast for the second estimate: 3.1 percent

#12: Canada Governing Council Member Wilkins Speaks (05/30/2019 Thursday 14:15 GMT)

Senior Deputy Governor of the Bank of Canada Carolyn Wilkins is scheduled to speak about the global and Canadian economic developments and how their impact on the recent interest rate decision at the Calgary Chamber of Commerce. The audience is expected to ask questions. Governing Council members set the country’s key interest rates. At their public engagements, they often drop subtle clues as regards the monetary policy. The text of his speech will be released at the listed time. He will deliver his speech 15 minutes later.

#13: China Manufacturing PMI (05/31/2019 Friday 01:00 GMT)

In China, the NBS Manufacturing PMI unexpectedly fell to 50.1 in the month of April from the five-month high level of 50.5 in the prior month. The reading for the month missed analysts’ expectations for a reading of 50.5. Growth slowed for new orders and output. Employment declined at a faster pace and new export orders continued to decline. Forecast for May 2019: 49.9

#14: Canada GDP (05/31/2019 Friday 12:30 GMT)

Canada’s economy contracted 0.1 percent on a month-over-month basis in February, following the 0.3 percent growth reported in January. Analysts had expected the Canadian economy to stall. The output from goods-producing industries declined 0.2 percent, driven by a deceleration in mining, quarrying, and oil and gas extraction, and manufacturing activities. On the other hand, construction and utility sectors registered growth. Service-producing industries declined 0.1 percent, led by finance and insurance, transportation and warehousing, real estate, rental and leasing, information and cultural sectors. Main gains were in retail trade, wholesale, and scientific, professional, and technical services.